Thank you for your telegram 369. [1] Reference your paragraph one
(b), the question of recommencing trade was in our minds and
Critchley is now working out a plan to endeavour to do something
about specific matter mentioned by you.

2. Setiadjit yesterday delivered a memorandum signed by
Sjarifuddin to Committee in close conformity with the suggestions
set out in my telegram K1. [2] Unless you telegraph for text I
will send the memorandum to you through Singapore bag. [3]
Memorandum was made public and has been published in Aneta and I
think it will be publicised extensively by foreign correspondents
including Australian.

3. Reference your paragraph 5, I agree that pressure from United
States, United Kingdom and Australia would be most helpful and
advisable in this connection. However I have apparently succeeded
in my endeavours to appear impartial and have established very
friendly relationship with Dutch officials particularly Van
Vredenburch and I think it preferable at this stage that I should
continue in this way and would therefore prefer Australian
pressure be applied in such a way as not to link the Committee or
myself with it.

4. As I have said before the Americans keep informing me that
pressure has been and is constantly being applied by the United
States on The Hague but I can only guess that such pressure was
the withholding of loans. Early information as to this would be
most helpful.

5. In the actual discussions between Technical Committees on the
cease fire [4] delay has been due to differences of opinion in
regard to areas occupied or controlled by parties behind the Van
Mook line and their freedom of action therein. Without agreement
on this point it has been impossible to issue cease fire orders
which would not conflict. Before pressing this matter (which
depends on the interpretation of the November 1st resolution) to
conclusion I have had to await Van Zeeland's reply which has now
been received. In this he gives his assent that the Committee may
interpret the November 1st resolution on the advice of Military
Advisers of Belgium, Australia and the United States.

Unfortunately the Belgian adviser is adopting an irreconcilable
attitude to the Australian and United States advisers who are in
agreement.

6. However, whilst technical discussions continue a very important
and hopeful development has occurred in the last two days on
military level. Campbell was informed by the Belgian adviser,
Colonel Servais, most informally, that the Dutch have told the
latter that they would move back to the August 4th positions
provided that on a military level-
(1) Such positions were agreed upon by both parties;

(2) That satisfactory demarcation lines and zones were agreed
upon;

(3) That the Republican troops with full arms and equipment would
move from the zone and behind it to the Republican area;

And on political level that a satisfactory arrangement could be
come to for the maintenance of law and order in the zones,
preferably by joint force. I have some reason to believe that the
Dutch may be genuine in this and Campbell is doing all he can to
finalise the matter on a military level so that the Committee
could then take up political adjustments in regard to the control
of zones.

7. I consider it probable that the Dutch willingness mentioned in
the last paragraph was the result of communication by Servais to
the Dutch of the determination of Graham and myself to interpret
the resolution as requiring the Dutch to withdraw to August 4th
positions and our further determination to report the refusal or
failure to withdraw to the Security Council. Whatever the reason
for any change in the Dutch attitude, the probability of such a
change is corroborated by usually reliable sources of personal
information to myself.

8. I have informed Graham of this development and I now feel sure
that failing agreement by the Dutch to withdraw he will come with
me and report to the Security Council although he is still a
little nervous as to this. I know that his staff do not share his
nervousness and are pressing him.

9. In view of this apparent change of circumstances I have
deferred temporarily acting upon the suggestion for the imposition
of time limit on the cease fire discussions [5] and am naturally
straining every effort to have the agreement on this aspect before
substantive discussions commence on the ship. My estimate is that
the chances of success on this are about even. Tactics with my
approval which Brookes has been adopting in the cease fire
Committee is that [of] working either through the Indonesians or
the Chairman. In this way it has been possible to [maintain] the
position of impartiality whilst achieving the same.

10. It was reported in Aneta today that Neher, Dutch Minister for
Reconstruction, is leaving for the N.E.I. Monday 'for discussions
on formation of an organ to share responsibility of the Lieutenant
Governor-General'. A further report in Aneta today stated that the
object of Neher's visit is 'to discuss further course of political
developments in co-operation with Mr. van Vredenburch'. The Dutch
have not yet officially appointed representatives for substantive
discussions but have unofficially assured the Committee that
representatives will be appointed and ready by the ship's arrival
next Tuesday. In this connection I have learned that it is
possible that the Dutch, although they will have appointed a
delegation, will not in fact be ready to commence substantive
discussions until Thursday 4th December. As Neher leaves Holland
on Monday, this suggests that he will lead the delegation. In this
event pressure at Hague becomes even more important. Meanwhile any
background on Neher would be helpful.

11. Throughout discussions to date we have ensured that the
Committee dealt with Vredenburch and not with Van Mook or Spoor
except in his presence. This has, I am sure, helped to strengthen
his position. We cannot see any satisfactory agreement being
negotiated if Van Mook or Spoor and not The Hague and its
representatives are made the responsible Dutch spokesmen. Pressure
by the United States or United Kingdom specifically and urgently
directed towards elimination of Van Mook's power and complete
taking over by The Hague would be invaluable. Here, I even suggest
that such pressure might be towards removal of Van Mook from his
present office.

12. Graham is going to Djokjakarta on Sunday to broadcast [6] but
while there will endeavour to ascertain from Sjarifuddin the
Republic's requirements and in particular whether they are willing
to commence discussions with Linggadjati as a starting point.

13. In this connection Sjarifuddin had a conversation with Brookes
during the latter's recent visit to Djokjakarta with the Cease
Fire Committee. Sjarifuddin said that he did not consider
immediate independence was the prime objective of the Republic
during the coming discussions provided that guarantee was given
that this would be achieved by some specified date in the not too
distant future. He felt that the essential matters were financial
and economic, namely that the doors must be left open to the
Republic to raise loans, obtain supplies and [7] (financial,
medical, scientific etc) from nations other than Holland. He had
no objection to the Dutch providing the greater part of these aids
as a start. Brookes gathered that Sjarifuddin would use the
question of immediate sovereignty as a bargaining counter to
obtain his other objectives if this became essential. If the Dutch
still [put] forward the idea of United States of Indonesia the
Indonesians will probably insist that their position in the
Federation is based on the proportion of their population and
resources.

14. At present the Committee has its hands extremely full with an
endeavour to conclude satisfactory cease fire talks, arrangements
to commence substantive discussions on ship and endeavouring to
reach agreement as to the procedure to be adopted and the best
starting point for substantive discussions. All of these matters
are making it difficult for me to get Graham's mind on to
Sjarifuddin's information and to persuade him to forward it to the
Security Council but I will keep at him. Meanwhile I think that
any publicity that were given to the statement would keep the
Republic's cause.